5 million workers have no right to enforce rights with ‘parent company’, research shows

06 April 2018

Five million workers in the UK do not currently have the right to bring workers’ rights claims against their parent employer, for reasons such as that they work through an agency or for a franchise.

This is according to new research from the TUC, which found that 3.3 million are employed through an outsourced company; 615,000 work for franchised businesses (such as McDonalds outlets); and at least 1 million are hired through recruitment agencies, umbrella companies and personal services firms.

Calling on the government to provide workers with the right to hold parent companies to account on abuses such as non-payment of the minimum wage and holiday pay, the TUC pointed to the Australian Fair Work law, which means that franchisers like McDonalds and other chains have liability for all staff in the supply chain.

The Institute of Employment Rights agrees that employment law must be adapted to take into account an increasingly fragmented workplace. In 2017, Phil James and David Walters authored IER report Health and Safety at Work: Time for Change, in which it was argued that in some industries, heads of supply chains should have liability for the health and safety of workers employed by outsourced companies. This proposal is also put forth in our Manifesto for Labour Law.

TUC General Secretary, Frances O’Grady, said: “This is an issue that affects millions, from fast food workers to people working on building sites.

”Employers have a duty of care to workers in their supply chains. They shouldn’t be allowed to wash their hands of their responsibilities.

“Joint liability must be extended to parent employers. Without it they can shrug their shoulders over minimum wage and holiday pay abuses.”